EIGHTH AMENDMENT TO
AMENDED AND RESTATED
GOLD CONSIGNMENT AGREEMENT
DATED AS OF MARCH 30, 2001
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THIS EIGHTH AMENDMENT is made as of the 29th day of July, 2005, among
SOVEREIGN BANK (formerly known as Rhode Island Hospital Trust National Bank), a
Federal Savings Bank with an office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, as agent ("Agent") and as a bank ("Sovereign"
and together with the other lending institutions from time to time collectively,
the "Institutions"), SOVEREIGN PRECIOUS METALS, LLC, a Pennsylvania limited
liability company ("LLC"), FINLAY FINE JEWELRY CORPORATION, a Delaware
corporation ("Finlay") and EFINLAY, INC. a Delaware corporation ("eFinlay").
WITNESSETH THAT:
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WHEREAS, Sovereign, Finlay and eFinlay are parties to a certain Amended
and Restated Gold Consignment Agreement dated as of March 30, 2001, as amended
by a First Amendment to Amended and Restated Gold Consignment Agreement dated as
of December 31, 2001, as further amended by a Second Amendment to Amended and
Restated Gold Consignment Agreement dated as of September 30, 2002 as further
amended by a Third Amendment to Amended and Restated Gold Consignment Agreement
dated as of April 4, 2003, as further amended by a Fourth Amendment to Amended
and Restated Gold Consignment Agreement dated as of July 6, 2003, as further
amended by a Fifth Amendment to Amended and Restated Gold Consignment Agreement
dated as of May 27, 2004, as further amended by a Sixth Amendment to Amended and
Restated Gold Consignment Agreement dated August 20, 2004, as further amended by
a Seventh Amendment to Amended and Restated Gold Consignment Agreement dated as
of November 22, 2004 and as further amended by a Consent and Amendment dated as
of May 19, 2005 (as amended, the "Consignment Agreement"), relating to the
consignment by the Institutions to Finlay;
WHEREAS, the parties desire to further amend and modify the Consignment
Agreement in certain respects;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Article 1 of the Consignment Agreement is hereby amended by deleting
the defined terms "Consignment Base Rate" "Consignment Fixed Rate" and "Maturity
Date" and replacing them with the following:
"Consignment Base Rate: A rate determined by the
Agent from time to time in its sole discretion, which rate may
be changed by the Agent following
seven (7) days prior Notice to Consigners plus the Applicable
Consignment Rate Margin."
"Consignment Fixed Rate": With respect to an agreed
upon tenor and so long as market conditions permit, the rate
per annum equal to the applicable fixed rate determined by LLC
in its sole discretion plus the Applicable Consignment Rate
Margin.
"Maturity Date: the earliest of (a) October 31, 2007;
provided, however, if the Dollar Facility is extended through
at least October 31, 2008 (on terms acceptable to Agent) such
date in clause (a) should be October 31, 2008, (b) the
maturity date from time to time in effect under the Dollar
Facility, or (c) such other date on which all Obligations may
become due and payable pursuant to the terms hereof."
2. Article 1 of the Consignment Agreement is hereby further amended by
adding the following new definitions:
"Applicable Consignment Rate Margin: the applicable
percentage set forth for the corresponding level based on the
applicable Leverage Ratio as determined on a rolling four
quarter basis and adjusted upon receipt by Agent of the
quarterly Financials, as follows:
<TABLE>
--------------- ----------------------------------------- --------------------------------
Level Leverage Ratio Applicable Consignment
----- -------------- ----------------------
Rate Margin
------------
--------------- ----------------------------------------- --------------------------------
I. <3.75:1:00 2.00%
--------------- ----------------------------------------- --------------------------------
II. <4.00:1.00 but >= 3.75:1.00 2.25%
--------------- ----------------------------------------- --------------------------------
III <4.25:1.00 but >= 4.00:1.00 2.50%
--------------- ----------------------------------------- --------------------------------
IV. <4.50:1.00 but >= 4.25:1.00 2.75%
--------------- ----------------------------------------- --------------------------------
V. <4.75:1.00 but >= 4.50:1.00 3.00%
--------------- ----------------------------------------- --------------------------------
</TABLE>
Leverage Ratio: the ratio of Indebtedness to
EBITDA."
3. Section 8.3 of the Consignment Agreement is hereby amended by
deleting Section 8.3.1 in its entirety and replacing it with the following:
"Consolidated EBITDA to Consolidated Periodic
Financial Obligations. Consignee will and where applicable,
each Consignee will cause its Subsidiaries on a consolidated
basis to maintain as of the end of each period of four
consecutive fiscal quarters the ratio of (a) the excess, if
any, of (i) Consolidated EBITDA of the Parent and its
Subsidiaries for such period less (x) the amount of cash
applied by the Parent to the payment of income taxes of the
Parent and its Subsidiaries in respect of such period, whether
directly or pursuant to the Tax Allocation Agreement less (y)
the amount of Capital Expenditures made by the Parent and its
Subsidiaries during such period to (b) the amount of
Consolidated
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Periodic Financial Obligations (inclusive of interest and cash
dividend payments) of the Parent and its Subsidiaries of not
less than the ratio opposite such date in such table:
<TABLE>
For Fiscal Quarter
Ending on or About: Ratio:
------------------ -----
10/31/05 1.44:1.00
1/31/06 1.53:1.00
4/30/06 1.53:1.00
7/31/06 1.53:1.00
10/31/06 1.53:1.00
1/31/07 1.62:1.00
4/30/07 1.53:1.00
7/31/07 1.53:1.00
</TABLE>
4. Section 8.3 of the Consignment Agreement is hereby further amended
by deleting Section 8.3.2 in its entirety and replacing it with the following:
"8.3.2. Indebtedness to EBITDA. No Consignee will and
where applicable, each Consignee will not permit its
Subsidiaries to, permit the ratio of (i) the aggregate
principal amount of all Indebtedness for Borrowed Money of the
Parent and its Subsidiaries on a consolidated basis as of any
fiscal quarter ending date set forth in the table below to
(ii) Consolidated EBITDA of the Parent and its Subsidiaries
for the period of four consecutive fiscal quarters ending on
such fiscal quarter ending date in such table, to exceed the
ratio set forth opposite such date in such table:
<TABLE>
Fiscal Quarter
Ending Date: Ratio:
----------- -----
10/31/05 6.05:1.00
1/31/06 3.30:1.00
4/30/06 4.18:1.00
7/31/06 4.62:1.00
10/31/06 4.95:1.00
1/31/07 2.86:1.00
4/30/07 3.85:1.00
7/31/07 3.85:1.00
</TABLE>
5. Section 8.3 of the Consignment Agreement is hereby further amended
by deleting Section 8.3.3 in its entirety and replacing it with the following:
"8.3.3. Minimum EBITDA. No Consignee will and where applicable, each
Consignee will not permit its Subsidiaries to, permit Consolidated
EBITDA of the Parent and its Subsidiaries for any period of four
consecutive fiscal quarters ending on any date set forth in the table
below to be less than the amount set forth opposite such date in such
table:
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<TABLE>
Date: Amount:
---- ------
10/31/05 $61,275,000
1/31/06 $68,400,000
4/30/06 $69,350,000
7/31/06 $69,350,000
10/31/06 $70,300,000
1/31/07 $73,150,000
4/30/07 $74,100,000
7/31/07 $74,100,000
</TABLE>
6. Finlay and eFinlay each hereby grant and reconfirm the security
interest granted to Agent pursuant to the Security Agreement.
7. The effectiveness of the transactions described herein shall be
subject to delivery to LLC of this Eighth Amendment and payment in full of the
closing fee (to be shared pro rata between the Institutions) of One Hundred
Eighty Seven Thousand Five Hundred Dollars ($187,500).
8. Each of Finlay and eFinlay and the Agent hereby agree that, except
as expressly provided herein, the terms and provisions of the Consignment
Agreement remain unchanged and the Consignment Agreement remains in full force
and effect in accordance with its terms. The term "Agreement" as used in the
Consignment Agreement and all references to the Consignment Agreement in any
other documents or agreements among any of the parties hereto which relate to
either Finlay or eFinlay shall refer, from and after the date hereof, to the
Consignment Agreement as amended and supplemented by this Eighth Amendment.
9. Each of Finlay and eFinlay hereby ratifies and reaffirms that (i)
the representations and warranties contained in the Consignment Agreement, as
amended by the terms hereof, are true and correct as of the date hereof, except
that references to financial statements shall refer to the latest financial
statements furnished pursuant to the Consignment Agreement and (ii) no Event of
Default (as defined in the Consignment Agreement) nor any event which with
notice or the lapse of time, or both, would constitute an Event of Default
exists as of the date hereof.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Eighth
Amendment to be executed in several counterparts, each of which shall be deemed
to be an original as of the day and year first above written.
SOVEREIGN BANK, as Agent and a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
SOVEREIGN PRECIOUS METALS, LLC, as Agent and a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President
COMMERZBANK INTERNATIONAL S.A.
By: /s/ ▇. ▇▇▇▇▇,
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Name: ▇. ▇▇▇▇▇,
Title: Vice President,
By: /s/ ▇. ▇▇▇▇▇▇▇
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Name: ▇. ▇▇▇▇▇▇▇
Title: Vice President
FINLAY FINE JEWELRY CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President, Treasurer and Chief
Financial Officer
EFINLAY, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President, Treasurer and Chief
Financial Officer